General Motors (GM) has fired 15 employees over its protracted recall disaster and is preparing another wave of recalls, Chief Executive Mary Barra told GM employees at GM’s technical center in Detroit this morning.
At the same time, Barra ruled out any high-level conspiracy in the 2.6 million-vehicle debacle. Citing a newly public internal probe, she said the faulty parts and fatal accidents that went on for almost a decade were born of bureaucratic bumbling and “individuals seemingly looking for reasons not to act,” rather than any sort of executive coverup or risky attempt to avoid extra expenses. “In the end, I’m not afraid of the truth,” Barra said.
The report, compiled by former U.S. prosecutor Anton Valukas, highlights a “pattern of incompetence and neglect” that Barra said was more “complex and nuanced” than simple attempts to save a few cents per vehicle on repair expenses. The 15 fired workers were dismissed for misconduct but also for incompetence and, in some cases, because “they simply didn’t do enough,” according to Barra.
GM is steering a fraught and narrow course. Financially, it hopes its 2009 bankruptcy filing can shield it from liability in accidents involving earlier models. At the same time, however, it needs to be sensitive and contrite; after all, it still has cars to sell (which it is still managing to do quite well).
Barra said the company is preparing a compensation program for victims, although she did not offer details. “This is not just another business crisis for General Motors; we aren’t just going to fix this and move on,” Barra said. “I never want to put this behind us.”
The report comes just days after a Reuters investigation found the number of fatalities caused by defective ignition switches could be six times the amount GM has mentioned to date.
Attorneys representing the owners of cracked-up cars plan to use GM’s report to buttress their cases. But when all is said and done, the GM report released today may turn out to be the least meaningful of all the ongoing inquiries. The U.S. attorney’s office in Manhattan is conducting a criminal probe; state attorneys general and the SEC are also conducting investigations. “Fixing this is going to take more than getting rid of some people and moving boxes around on the org chart,” Michelle Krebs, senior analyst at AutoTrader.com, told Bloomberg News. “This is going to require culture change and an ongoing vigilance.”
5 June 2014 | 2:41 pm – Source: businessweek.com